Bahrain: Investing

FDI in Figures

In terms of GDP percentage, the FDI flux has decreased. Due to the global financial crisis, the FDI influx into Bahrain shrunk significantly in 2009 and should only be recovering slowing in the coming years, depending on the economic recovery. The FDI are impeded by the country’s very slow privatization program, the small scale of the domestic market and the inflexible labor market.

However, Bahrain benefits from one of the most open economic environments and a regulatory framework attractive to FDI searching for a gate into the Gulf and Middle East markets. Ranking #16 on the world's list, Bahrain is also the only country in the MENA (Middle East and North Africa) region to be included among the 20 most liberal economies of the world. Bahrain has the lowest tax rates in the Gulf area, without restrictions of free-zones. 100% ownership is authorized in about 95% of the economic activities, without the need for a local partner. The excellence of the country’s logistic infrastructure is also one of the main attractive factors of the country (Bahrain's airport, the new port Khalifa bin Salman, the bridge of King Fadh, the future bridge of the Friendship between Bahrain and Qatar projected for 2013). The Kingdom is currently investing 2.9 billion USD in improving its infrastructures. Finally, the access to new information technologies and communications is widely spread in the Kingdom.

The service sector remains the main one for FDI. Kuwait and Turkey are the main two investing countries in Bahrain.

	Bahrain	East Asia & Pacific	الولايات المتحدة	Germany
Index of Investor Protection	5.7	5.3	8.3	5.0

Source: Doing Business

Note: The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	1,794	257	156
FDI Stock (million USD)	14,741.2	14,998.1	15,154.0
Performance Index*, Ranking on 141 Economies	31	104	-
Potential Index**, Ranking on 141 Economies	23	-	-
Number of Greenfield Investments***	65.0	70.0	-
FDI Inwards (in % of GFCF****)	25.7	70.5	-
FDI Stock (in % of GDP)	67.3	74.2	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

Sales Tax: 0% (except on gasoline where Sales Tax of 12% is applicable).
Company Tax: None except for oil companies at a 46% rate.
Withholding Taxes: No whithholding taxes (interests, dividends, royalties).
Bilateral Agreement: Egypt and Bahrain are bound by a Double Taxation Agreement which has been signed on September 17th of 1997.
Social Security Contributions Paid By Employers: 12%

Investment Opportunities

Tenders, Projects and Public Procurement: Tenders Info, Tenders in Bahrain
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Bahrain.
Useful Resources: Economic Development Board of Bahrain (EDB)
Egyptian Embassy in Bahrain
Villa 18, Road 33, Area 332, Kuwait Street, Mahouz
Manama
Phone: (+973) 17720005 - 17721597
Fax: (+973)17721518
Contact the Embassy via Email.
Embassy of the kingdom of Bahrein in Egypt
Serlinka Street in Zamaliq
CAIRO - The Arab Republic of Egypt
Phone: 0020227350642
Fax: 0020227366609
Contact the Embassy via Email

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